Cold Chain Management: Part III

Along with certification, leading cargo airports here in the States are seeing more investment in cold chain infrastructure. Philadelphia's International Airport, for example, recently welcomed the opening of a $5 million, 25,000-square foot temperature-controlled warehouse facility operated by American Airlines Group Inc.'s cargo division.

According to Thomas Grubb, manager of cold-chain cargo for American Airlines, this is the first of its kind built by a commercial air-cargo company. The facility can store medicines and medical devices at consistent temperatures of 2 to 8 degrees Celsius.

“We are seeing an increased demand to obtain such medications and increasing complexity of the products themselves. And given our proximity to drug-makers located on the eastern seaboard, major pharma companies ship from here to emerging markets in South America and Africa,” says Grubb

American Airlines says that Deutsche Post DHL Group and FedEx have also been ramping up development of cold-chain facilities domestically. Other shippers include Teva Phamraceutical Industries Ltd. Pfizer Inc., Merck & Co., and GlaxoSmithKline PLC.

Lynden International Logistics Co. has an equally impressive client base in North America and has recently announced its expansion in the Greater Toronto Area (GTA) with the opening of a second facility in Milton, Ontario.

“The new 65,000-square-foot facility expands our capacity in the GTA and adds to our network of locations in Canada which includes Toronto, Calgary and Vancouver,” says Kevin Gillies, Vice President and General Manager of Lynden International Logistics Co.

Lynden's shippers include manufacturers of pharmaceutical and healthcare products for humans and animals.

“We provide warehousing, distribution, order fulfillment, customer service, transportation, order-to-cash and other specialty services,” says Gillies. “The range of offerings has to be pretty wide, given that shippers are demanding cold chain management, ambient storage and/or controlled drug storage.”

Farm-to-fork

The farm-to-fork movement has also added extra pressure to cold chain demands in food services, says Bob Biesterfeld, vice president of North American Truckload for C.H. Robinson Worldwide, Inc.

“Customers in northern regions are coming to expect the availability of fresh tropical fruit all year long,” he says. “As the world shrinks, so too does our idea of ‘seasonal produce' and ‘regional products.'”

He recalls that in 1980 only 33 percent of perishable goods were shipped in refrigerated containers, and that it jettisoned to 90 percent by 2010, where it remains today.

“Temperature controlled products can now withstand longer transit times without spoiling and consumers around the world can experience exotic foods and goods—perhaps for the first time—without leaving their local grocery store,” he says.

Pier-Luigi Sigismondi, Chief Supply Chain Officer, Unilever, is the author of Enabling Trade From Farm to Fork, a report for the World Economic Forum, in Geneva. His global take on the issue is somewhat more circumspect.

“Transport costs are the most important challenge cited by developing-country suppliers in connecting to global value inherent characteristics such as low value-to-bulk ratios, fragility and perishability,” he says.

According to Sigismondi, initiatives to improve underlying infrastructure are typically government-led, but private-sector involvement is critical in ensuring efficient allocation of resources along key transport corridors.

“Regulations impacting transport services should be designed to help enable competition, scale and standardization,” he says. “Development of technologies to facilitate efficient movement and storage of crops is also important, and must be tailored to the constraints of specific value chains.”

Along with other global thought leaders Sigismondi maintains that “creative ownership models” can help to overcome the challenges of mobilizing capital for investment in these improved technologies and logistical arrangements.

“But supply chain managers already have access to the private-sector tools and services to achieve most of their distribution strategies,” he adds. “Irrespective of mode, new technologies are accelerating the global cold chain trend.”

SC
MR